137 million subsidy to advance 584% Shenyang machine tool is cop-out

For Shenyang Machine Tool (000410) in 2010 net profit can be increased by 584%, more like a oolong.　　In the general equipment manufacturing industry in the A-share market, the leading enterprise Shenyang machine tool is the only one total assets of tens of billions of listed companies, however, this year in the first three quarters of the 6.86 billion yuan operating income of the leading enterprises, operating profit is only a modest 66.3 million yuan, profit margins of less than 1%. However, the company in the first half of last year has been two local governments to a total of 137 million yuan subsidy, which is equivalent to the company's main profit in the period of more than twice times.　　According to the financial requirements, this money is to be included in the non-operating income, and directly into the total profit. This directly led to Shenyang machine tool in the 2010-year performance of the explosion.　　However, the abrupt changes in financial data have not changed the status quo of corporate profitability and have not improved the prospects for investors to see the company's earnings.　　Eroded profits in the cradle of China's heavy industry, Shenyang machine tool, witnessed the Chinese lathe industry's growth history, in Shenyang machine Tool was born the new China's first lathe and the first CNC lathe.　　However, the past glory has not continued to become today's competitiveness.　　In the current domestic machine tool industry of similar listed companies, CNC machine tool production and marketing ratio has been basically to 80%-90% level, however, Shenyang machine tool in the numerical control ratio in the early 2010 only 51%, last year the company accelerated the production and sales of CNC machine tools, but still will not exceed the proportion of 60%. As an old state-owned enterprise, the common problems in the reform are embodied in Shenyang machine tools.　　Among them, the most criticized by investors is that the company perennial high "three fees", that is, sales costs, management costs and financial costs. In the third quarter of 2010, the company's main business income was 2.5 billion yuan, a 54% increase from the same period in 2009, but the net profit attributable to the parent company was only 10.7 million yuan, down 49% from the same period in 2009. The root cause of the company's decline in gross profit margin is the high cost of operating and financial.　　According to the company's three quarterly reports last year, the company's sales growth in the third quarter was 54%, but management costs rose by 72%. High "three fees", the most direct result is that the company's gross profit margin continued to decline. At the end of 2009, the company's gross margin could still reach 21.6%, and by the third quarter of 2010, gross margin was only 16.24%.　　At the same time, the company's cost rate, but reached a high level of 16.83%. "The three-fee problem is not likely to improve in the coming period."　　"Guotai related industry analysts in the field survey of Shenyang machine tools to make such a decision. Government "red envelope" trouble as an old state-owned enterprises, huge employment burden, so that the company in the product structure adjustment faced with a lot of constraints. The obvious point is that the average lathe, which now accounts for 17% of the company's product structure, has less than 9% profit margins,The company still has to maintain the stability of production and marketing.　　The Chinese lathe industry, "Big Brother", in order to strive for competitiveness in the future market, only the choice of high profit product line constantly add pounds.　　According to the reporter's understanding of Shenyang machine tool, early last year, the company plans to raise funds through the non-public offering 2.15 billion yuan, for heavy CNC industrial base construction, CNC machine Tool Project transformation, at present, although the issue has not yet been approved by the SFC and has not yet been implemented, but the investment project has been in advance funds under the company to start. "This project is actually the company's expansion project, even if the future does not issue additional, the company will use its own funds to complete the construction of the project."　　"January 7, the company's office staff in the interview with reporters said." In addition to the traditional CNC machine tool project input, the company began to aim at the core components of CNC machine tools.　　Because of the current domestic Advanced machine tool CNC system basically rely on imports, therefore, the company is planning through self-developed "Fei Yang" CNC system to rob this market. It is in order to speed up the "Fei Yang" high-end CNC system development, development and the formation of industrialization scale, the Shenyang economic and technological development zone in May and June respectively to the company allocated 75 million yuan and 62 million yuan of financial subsidies.　　In accordance with the company's subsequent announcement, the company will take this amount of 137 million yuan into 2010 of non-operating income. In finance, non-operating income will directly affect the company's net profit, and according to Guotai analyst statistics, the company in the first half of 2010 received a total of 143 million yuan of government subsidies, the inflow of wealth not only the company's 2010 annual net profit surged 584%,　　At the same time, the company's earnings per share increased from 2009 to 0.05 yuan to 2010 0.33 yuan. Clearly, this huge "profit" does not belong to shareholders, so despite a surge in profits, but the company's share price in the two-tier market performance did not appear to be the slightest ripple. Conversely, if this part of the incoming wealth is deducted, the company's existing share price is obviously overvalued.　　According to the China Silver International machinery industry analyst Xu Min, if the net profit after the Non-recurrent profit is 54.49 million yuan, the equivalent of 0.1 yuan per share income.　　Q&a q= Huaxia Financial a= International Machinery industry analyst Xu Min: in the A-share machine tool industry, as a leading enterprise Shenyang machine tool does not seem to be very concerned about the organization, what is the reason? A: The company is technically good, but because of the "three fees" is relatively high, which led to its profitability is not very good.　　In addition to the "three fees" problem, there are product structure and other issues, although at home their technology is good, but compared with many foreign competitors, or worse.　　Q: At present, Shenyang machine tool is to promote its independent research and development of "Fei Yang" CNC system, the future of this system will bring profits to the company's expectations? A: At present the domestic in the numerical control systemThe core components are mainly imported, but there are also Shenyang, Dalian and other enterprises in the localization.　　This system can not be a separate profit-making, and ultimately through its CNC machine tools to complete.　　Q: It is understood that at present the company in the transformation of the CNC system, although there is no beginning to issue additional, but there are some projects started early construction, this will affect the company's future profit expectations?　　A: Those projects have not been completed, it is not expected to reach production this year, even if the future Tatsu production, it will not be able to improve the company's performance, because many of the investment projects sometimes committed to the better, but ultimately to the postpartum are not necessarily able to achieve.　　Market performance after a round of heavy volume last October, Shenyang machine tool stock prices began to appear shrinking trend. October 21, 2010, the company's share price set at 16 yuan/share of the peak, after two months of consecutive declines, the share price has fallen to January 6 of this year's 12.28 yuan/share, a decline of more than 23%.　　In the same period, the machinery industry plate index rose 7%.　　According to the earnings forecasts previously given by BOC International, the company expects earnings per share in 2010 and 2011 to be 0.5 yuan and 0.43 yuan respectively, with a corresponding earnings ratio of 24.4 and 28.4 for the current share price. With the company's share price falling, capital flow also shows a net outflow. According to the dispatch statistics of the company's capital flow in the past three months, from November 12, 2010 onwards, the company's single-day fund accumulated net flow began to be negative, then the way continues to decline, to January 5, 2011,　　The total net flow of funds has reached-210 million yuan, of which, small single net flow of 20 million yuan, large single net flow-230 million yuan, outflow is almost 10 times times the amount of inflow. According to the three quarterly earnings figures, as of September 30, the institutional holding company shares a ratio of 8.6%. Among them, the Pacific life, Xinhua Life and the Chinese insurance company owned about 16 million shares, while the long Shengtong, Bao Ying strategy, the core and the country to vote UBS 4 funds have a total of 16.63 million shares of circulating shares. (Zhang Coquang)